Prepare a federal income tax return

Reference no: EM133654215

Question: You should be ready to do this assignment after approximately class 9, though the skills which are necessary for this assignment are covered gradually throughout the course and cannot be attributed to any single class or small number of classes. Lecture 3 is particularly important in preparing you for this assignment.

John and Abigail Adams ask you to prepare their tax return for 2022. They give you the following information upon which to work.

1) John's social security number is 741-25-8963, while Abigail's is 147-85-2369. The have two children: Charles, ss# 333-33-3333 who is age 9 and Susanna, age 5, whose social security number is 444-44-4444. All four live at 654 Main Street, Freedomville, FL 20000.

2) John works for Pepper Industries, Inc. His Form W-2 is attached. Abigail works for St. Joseph's Prep School. Her W-2 is also attached.

3) John and Abigail own a brokerage account and a savings account. They earned some interest and dividend income from these. Their Forms 1099 that indicate these amounts are attached.

The W-2s and 1099s can be accessed here:

4) In addition, John and Abigail made the following relevant stock transactions:

- They bought 200 shares the stock AAXX on Feb. 1, 2021 for $5,000. On March 10, 2021, they sold all 200 shares for $6,500.

- They bought 500 shares the stock BBX on Feb. 1, 2021 for $10,000. They sold those shares on April 15, 2021 for $12,200.

- They bought 600 shares of the stock CCC on January 15, 2021 for $13,000 and sold those same shares on March 15, 2021 for $12,100.

[Assume that all these numbers include brokerage fees and commissions.]

5) John and Abigail own their home and they have a 30-year mortgage loan on their home. In 2021, they paid $8,500 in mortgage interest and $1,900 in property taxes. They also contributed a total of $2,000 in cash to Section 501(c)(3) charities.

6) In addition, John and Abigail owned a summer home that they sold this year. They bought the house on December 1, 2011 for $75,000. On January 1, 2021, they sold the same house for $85,000. Assume that they had made $5,000 in capital improvements to the house. You may discount any depreciation that they may have taken in previous years.

Prepare a federal income tax return (Form 1040) and all appropriate schedules for John and Abigail.

Reference no: EM133654215

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